Canada poised to spend big bucks on storage

The poor economy is giving storage vendors bloody noses, but robust demand will soon nurse them back to health, according to an IDC-sponsored snapshot of Canada’s storage market.

On Wednesday, Toronto-based research firm IDC Canada Ltd. discussed the results of an end-user storage survey conducted earlier this year. It found a period of sluggish sales – brought on by reduced IT spending and the effect of failed dot-com equipment fire sales – has slowed growth in the storage market.

But expect that period to be short-lived, said Alan Freedman, servers, workstations and storage research manager at IDC. He predicted that the Canadian disk storage market would grow 11 per cent annually, nearly doubling from its current market value of C$1.6 billion to $2.7 billion by 2005.

The reason is simple, according to Freedman – storage deals in data, and data means money. “Storage is one way for a company to develop a competitive advantage,” he said.

More and cheaper bandwidth is adding fuel to the fire. Also, corporate servers are being squeezed by beefy e-commerce and customer relationship management applications, forcing IT managers to seek relief in the form of more powerful storage systems.

“The larger and medium-sized businesses said client and product data is far and away the number one [driver],” Freedman said, who added that most businesses plan to double their storage capacity every five to 10 months.

End users may be rushing to add storage, but they are also not completely satisfied with the vendor offerings, particularly their inability to deal with interoperability.

“Corporate IT data centres are heterogeneous,” Freedman said. “Interoperability is an issue.” Expect more partnerships, alliances and “competition” among storage players as they race to overcome that hurdle, he added.

IDC found corporate Canada relies primarily on Unix-run systems configured in direct-attached storage (DAS) architectures. Windows is gaining ground, however, and is expected to close the gap by 2005. DAS, with 74 per cent of the market, is also expected to lose ground to networked storage technology during the same time frame.

IDC estimated that by 2005, storage attached networks (SAN) and network attached storage (NAS) will have captured just under half of the total market.

IDC also played down the role of storage service providers (SSP), noting most IT managers are wary about handing their core data to an as-yet-untested market segment. However, the headaches associated with storing secondary data will allow for some SSP growth, pushing the market from its current value of $16 million to $500 million by 2005.

IDC Canada is at